Controversial agents Foxtons has been taken over by its lenders – an American bank and a Japanese bank.
The development is part of an emergency refinancing and follows one of the private equity industry’s most ill-timed deals – and the estate agency industry’s best-timed one.
Jon Hunt, who founded Foxtons, sold the business at the top of the property market to private equity firm BC Partners for £360m in May 2007 – shortly before the market crashed.
BC has spent much of the last year attempting to renegotiate the massive loans it took out to fund its takeover deal, having admitted that it made a wrong judgement call.
Bank of America and Mizuho have now struck a deal to reduce the debt from about £300m to £120m in return for them becoming the majority shareholders.
Hunt has also written off a loan that he made to the firm, ending his association with the company he founded in 1981.
Foxtons management led by chief executive Michael Brown will receive a minority stake of as much as 20% depending on whether performance targets are hit.
BC will inject less than £50m of fresh equity, retaining its status as the biggest minority shareholder.
Foxtons have greeted the deal as a “capital reorganization” which delivers “a sound balance sheet to complement Foxtons’ strong trading performance and supports the company in continuing to build its position as London’s leading estate agency”.
Brown said: “Despite the credit crunch and recession, the strength of Foxtons brand and business model, and the quality of our people, mean we have continued trading profitably.
“Our strengths and future potential lie behind the capital reorganisation, and we are delighted we will continue to have the support of BC Partners and our banks going forward. We continue to face the future with considerable confidence.”
It is not thought that the development will affect Foxtons’ appeal against the High Court ruling on renewal fees – see later story.
Foxtons is taken over by banks
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Comments
The moral of the story is if you owe small sums, you will have the plugged pulled - owe shed loads and you can keep going forever.
Not long now SPICERHAART, Paul Smith said he would rather close than put more money in. He He
Overvaluing, fly boards and poor service? That IS the industry!
oh dear RIP
This company gives the whole buisness a bad name with their over valueing, fly boards and appaling service.
£360m for 24 branches most of which were leased premises!
£15m per branch!
What were they thinking?
Jon Hunt must be laughing his head off and probably has done everyday since he sold.
As ever little folk, probably never achieved anything much in life, in true cowardly style poke fun at quality business’s, I tend to find those beaten often do so, look at the rants from many at rightmove etc. Jon Hunt’s story, now that’s quality, try to aspire to him guys you lives will be better for it. If the next five posts are not silly negative you will spoil my day!!
i thoughts go out to all the poor little negs in there minis
lol
May I suggest that some of you who post coments behave a little more like professionals!
This is not unexpected. There will be others too I think
HA HA THEY SHOULD B CLOSED AS THEY MAKE OTHER AGENTS LOOK BAD!!
Foxtons - "London's leading estate agency" - Given another EAT news story - I wonder what the ASA view is although their claim in London would certainly appear stronger than Haart's in Cambridge.
Ha-ha.
How can you continue to trade profitably when your still £130,000,000 in debt!!!!!!!!!!!!!! haha